ISS recommends Williams shareholders back Energy Transfer deal

June 15 (Reuters) - An influential shareholder advisory firm recommended on Wednesday that Williams Co Inc stockholders vote in favor fellow pipeline company Energy Transfer Equity LP's takeover bid, a deal that has been in doubt for months.

Williams shareholders are scheduled to vote on the deal on June 27. Under the current terms, the merger must close by June 28, or the agreement expires.

Williams has accused Energy Transfer of trying to break the cash-and-stock deal. With the drop in oil prices, its value has plunged to about $20 billion from $33 billion when the companies reached an agreement in September, ending a pursuit that began in January 2015.

ISS said a better alternative for Williams shareholders might be to convert some of the cash component into equity at an appropriate exchange ratio, given the decline in commodity prices.

"Even many of the legitimate causes for concern ... appear, on closer examination, known or manageable risks," ISS said in the report.

The merger was intended to create more stability for both companies in the face of low oil prices.

The companies are set to face off in Delaware Chancery Court on Monday over tax issues that Energy Transfer says are hobbling the deal, as well as claims by each party that the other had broken its contact. (Additonal reporting by Amrutha Gayathri in Bengaluru; Editing by Saumyadeb Chakrabarty and Lisa Von Ahn)